Search results for "Informal sector"

How Parallel Markets Fueled Chronic Shortage in the Soviet Official Sector

1999

The paper presents a disequilibrium model of a pre-transition centrally planned economy, with explicit description of labour supply to the official sector, as well as illegal economic activities. Under weak assumptions, raising official prices for deficit goods leads to even higher inflation in the shadow sector and increases the labour supply to the official sector. However, aggregate supply does not grow as much as income, and (flow) excess demand in the official sector goes up, while excess demand in the aggregate market remains positive. Simulation results suggest that our assumptions and conclusions are consistent with estimates of monetary overhang obtained (in a different way) by oth…

Emerging Tiger? The Paradoxes of the Philippine Economy

2017

The Republic of the Philippines is an exception in the East and Southeast Asia realm. One of the richest countries of the region at the end of World War II, its rankings have slipped, and its growth rates have been weak for several decades. We examine the main causes of the mediocre economic performance of the country since the 1950s. Many analysts have pointed out an excessive bureaucracy, high levels of corruption and the lack of industrial investment in a country dominated by landed interests. After the high debt incurred during the Marcos administration, Philippine leaders have made every effort to improve the debt situation, choosing to pay back loans, but under investing in infrastruc…

Megacities without Global Functions.

2007

Present urban evolution is characterized by two major phenomena. On the one hand, the number of very large cities, the megacities, increases dramatically, especially in the less developed countries (LDCs). On the other hand, globalization leads to the emergence of cities coordinating complex and global economic activities, the global cities, especially in the more developed countries (MDCs). So, the two phenomena are diverging. A number of megacities do not exhibit any global function.The global performances of megacities are well correlated with their degree of economic development. But it is worth wondering why economic underdevelopment is consistent with urban growth but not with city gl…

Poverty, taxation and governance

2006

In a simple model based on political support approach, we show that poor and less egalitarian societies may impose a lower tax rate contrary to the prediction of the median voter approach. This is consistent with the available empirical findings. In the framework developed in this paper, the government can strategically design a weak governance system to promote informal activities for the poor. This constitutes an alternative redistributive strategy other than the standard tax-transfer policy. The government chooses the tax rate and the degree of governance simultaneously to maximize the average income of the poor in the informal sector of the economy, i.e. those who constitute the majorit…

What Explains Prevalence of Informal Employment in European Countries: The Role of Labor Institutions, Governance, Immigrants, and Growth

2011

This paper looks into institutional and other macro determinants of prevalence of informal dependent employment, as well as informal self-employment, in European countries, using European Social Survey data on work without legal contract in on 30 countries, covering years 2004-2009. Consistently with theoretical predictions, quality of business environment has a significant negative impact on prevalence of both types of informal employment. The share of non-contracted employees is negatively affected by perceived quality of public services and positively related to economic growth. Informal self-employment is positively related to growth in Europe at large, as well as in Eastern and Souther…

Informal employment in developing countries

2012

There is an ongoing debate among researchers and policy makers, whether informal sector employment is a result of competitive market forces or labor market segmentation. More recently it has been argued that none of the two theories sufficiently explains informal employment, but that the informal sector shows a heterogenous structure. For some workers the informal sector is an attractive employment opportunity, whereas for others – rationed out of the formal sector – the informal sector is a strategy of last resort. To test the empirical relevance of this hypothesis we formulate an econometric model which allows for several unobserved segments within the informal sector and apply it to the …

The Returns to Education in Rwanda

2005

05077; International audience; Based on data from the 1999–2001 Household Living Conditions Survey conducted by the Ministry of Finance and Economic Planning, we estimate wage equations for employees in Rwanda, treating the choice of employment sector as an endogenous process and making separate estimates for workers in the modern and traditional sectors of the economy. The results show that returns to education increase with the level of education, contrary to the pattern typically reported in the literature and that the returns to higher education is particularly high in Rwanda. A noteworthy feature in the results is that the returns to education are quite different across sectors of empl…

Obstacles Facing Smaller Business in Developing Countries

2003

Small and medium enterprises (SMEs) play a central role in economic growth and poverty alleviation in developing countries and transition economies. Yet small and medium-scale enterprise may suffer from a number of disadvantages compared with larger firms. Market imperfections, notably those caused by underdeveloped financial and legal systems, typically constrain small firms and severely limit their ability to grow. Economies of scale and entry cost favor large firms, and large entrepreneurs usually wield more political influence. Thus government rules and regulations may also be biased in favor of large firms. To the extent that market and government failures are more prevalent in develop…

Empowering credit - more than just money : the socio-economic impact of micro-finance on women in Nairobi, Kenya

2003

Introduction of the circular economy within developing regions: A comparative analysis of advantages and opportunities for waste valorization

2018

The introduction of effective solid waste management strategies in developing countries should be considered for improving sustainability at global level. Many barriers should be overcome, concerning the introduction of environmental policies, effective investments, social inclusion and public awareness, which are significant issues in low-middle income countries. The Circular Economy could represent the answer for improving current solid waste management activities worldwide, since denote the principle of waste valorization and recycling for boosting developing economies. This paper is focused on this theme, analyzing main opportunities for improving the current state of solid waste manage…